MGMT 20000 Chapter Notes - Chapter 1: Financial Accounting, Business Valuation, Accounting Equation

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Frank Kane

Document Summary

Accounting -a system of maintaining recorded of a company"s operations and communicating that information to decision makers. Accountants measure the activities of the company and communicate those measurements to others. Managerial accounting-accounting information that is provided for internal users(managers) Two functions of financial accounting are to measure business activities of a company and then to communicate those measurements to external parties for decision-making process. Investors-buy ownership in the company and have the right to share in the company"s profits. Corporation-is a company that is legally separated from its owners. Limited liability-prevents stockholders from being held personally responsible for the financial obligation of the corporation. Partnership-a business owned by two or more persons. Financing activities- transactions the company has with investors and creditors. Investing activities-transactions involving the purchase and sale of resources that are expected to benefit the company for several years. Operating activities- transactions relate to the primary operations of the company.